Florida LLC Operating Agreement Manager-Managed
A Florida LLC (Limited Liability Company) Operating Agreement manager-managed is a way in which you can manage your Florida LLC.3 min read
A Florida LLC Operating Agreement manager-managed is a way in which you can manage your Florida LLC. An LLC, or limited liability company, operates as a pass-through tax entity. One of the biggest benefits of operating any LLC is the limited liability that it offers its owners, meaning that they can’t be held personally liable for the outstanding debts and obligations of the business.
When operating an LLC, there are two ways in which it can be managed – either manager-managed or member-managed. When forming your Florida LLC, you will need to identify how you want the LLC to be managed. A member-managed LLC is one where its members, also referred to as owners, manage the LLC. However, the owners might choose to hire a third-party manager to oversee the business operations. If this is the case, they will hire a third party or choose one of their owners to oversee the business. More often than not, the members will choose a third party who has no ownership rights in the business to oversee the LLC.
If the members want to have full oversight into the business and know what is going on at all times, they will likely choose to operate as a member-managed LLC. This will allow them to have primary responsibility over employee hiring, business decisions, contracts, financial obligations, and so on. Generally, such members will have certain duties, but all members will have full oversight into the business affairs with complete control over the LLC.
Articles of Organization
When forming your Florida LLC, you will need to file the articles of organization, which is the primary business document used to form your LLC. This document will include the following information:
- Business name and address
- Names and addresses of all owners, including their title, i.e,. member or manager
- Purpose of the LLC
- How the business will be managed
After filing the articles of incorporation and paying the applicable fee required by the Florida Secretary of State, you will have to draft your LLC Operating Agreement. This is your company’s governing document that will identify how your business will be managed. It will provide specifics regarding each member, how they will oversee and/or manage the business, and how much time they will spend in the position.
Such responsibilities might include who has authority to enter into contracts, open a business bank account, sign checks, purchase goods or property, record meeting minutes, manager the overall financial records, etc.
The Operating Agreement should also contain information, such as:
- Voting rights
- Significant business decisions
- What happens if a member wants to leave the company
- What happens if a member gets divorced, becomes incapacitated, or dies
- How legal disputes will be handled
If you do plan on operating as a manager-managed LLC, the Operating Agreement should also identify who the manager is, how decisions will be handled, and what happens if a legal dispute arises between the manager and the remaining members.
Benefits of a Manager-Managed LLC
There are several benefits to operating as a manager-managed LLC, including the following:
- The manager doesn’t have to be an owner in the LLC
- You won’t have to publicly disclose the members names if you don’t want to
- Operating as a manager-managed LLC can help prevent potential legal disputes among members
You don’t have to hire one of the members as a manager of your LLC. In fact, most LLCs choose not to hire one of their members to manage the business, as the reason for hiring a manager in the first place is to reduce the amount of work the members have in running the business.
You won’t have to necessarily publicize the members’ names on the articles of organization. This helps provide anonymity for the owners of the LLC, so that their private information isn’t available to the public.
Having a third party manager oversee the business means that the manager might oversee any potential legal issues that might arise between the owners. This can help potential lawsuits down the line, as the manager will have oversight into the daily business operations and affairs.
If you need help learning more operating as a Florida manager-managed LLC, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law, and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.